Yahoo Finance Report: Boeing reaches $4.3 billion deal to buy back Spirit AeroSystems
The Boeing Co. has reached accord to repurchase Spirit AeroSystems in a stock deal valued at more that $4 billion, a major news organization is reporting.
The Reuters news agency reported that the boards of the two companies met and agreed to the deal on Sunday, and it could be announced as early as Monday.
The acquisition is reportedly a stock-for-stock transaction. Based on Spirit’s current price of $37.25 per share, Reuters calculated the deal’s total value at $4.34 billion.
It has been known for months that Boeing intends to buy back Spirit and with it, the Wichita aircraft plant Boeing sold off 19 years ago.
Although it became a separate company after the 2005 sale, Spirit remained a primary supplier of Boeing fuselages, which are assembled into completed aircraft at Boeing plants in the Seattle area.
Boeing is under pressure to take back and improve its quality control after a series of errors cost lives and twice grounded 737 Max jets, a staple product in the Boeing lineup.
The Max was grounded for months in 2019 and 2020 after two overseas airlines suffered a control malfunction which crashed two airliners and killed 346 people.
The planes were grounded again early this year after a door plug that was incorrectly installed in a Spirit-manufactured fuselage blew out during an Alaska Airlines flight in January. The plug was used to fill the hole where an optional emergency door is installed in some configurations of the plane.
No one was killed in that incident, but it triggered intense review by the Federal Aviation Administration. The FAA reported in March that the agency “found multiple instances where the companies (Boeing and Spirit) allegedly failed to comply with manufacturing quality control requirements.”
The FAA said it has “identified non-compliance issues in Boeing’s manufacturing process control, parts handling and storage, and product control.”
The reported sale of Spirit back to Boeing would bring Wichita full-circle.
In 2005, the community was devastated when Boeing, the No. 1 employer in a city that bills itself the Air Capital of The World, sold its mammoth plant to the investment firm that formed Spirit.
The sale involved abrogation of labor contracts and massive layoffs. Especially hard-hit were older, more experienced and higher-paid employees who had thought themselves secure, because of Boeing’s long track record in Wichita and reputation for taking care of its people.
Spirit took over as the city’s No. 1 employer, and recently was reported to have about 12,000 employees.
The Machinists Union that represents Spirit’s Wichita line workers reported about a week ago that approximately 310 workers have been laid off due to slowdowns in Boeing production caused by the quality-control controversy.
